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Massachusetts is typically not associated with sunny weather. However, given the state’s high electricity prices and excellent solar incentives, it’s no surprise that solar panels are commonly found on rooftops. Installing solar panels is a highly effective way to reduce electric bills and save thousands of dollars over time in the Bay State.
Key Solar Rebates and Incentives in Massachusetts
Residential Clean Energy Credit
The Residential Clean Energy Credit, previously known as the federal investment tax credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.
You can claim this credit on your federal income taxes, but it only applies if you purchase the system outright or finance it with a solar loan. Leasing the system disqualifies you from this credit. Additionally, you need a sufficient tax liability to benefit fully from the credit, though any unused portion can be carried forward each year until 2034 when the ITC expires. Tax-exempt entities, like nonprofits, may qualify for a direct payment.
MA Residential Energy Credit
Massachusetts offers a straightforward incentive with the MA Residential Energy Credit. Residents can receive a credit worth 15% of their solar panel system’s cost, up to $1,000, applied to their Massachusetts state income tax. This credit is available only if the system is installed on your primary residence.
Solar Massachusetts Renewable Target (SMART)
Launched in 2018, the SMART program replaced the solar renewable energy certificates (SREC) program. Under SMART, Massachusetts paid Eversource, National Grid, and Unitil customers a fixed rate per kilowatt-hour (kWh) of solar energy produced for 10 years.
Due to high demand, the incentive capacity was quickly exhausted, leading to minimal or no payments for many customers in 2023. Massachusetts Energy Resources Commissioner Elizabeth Mahoney has indicated that a new incentive program is being developed to replace SMART, with updates expected in 2024.
In the interim, you might be eligible for small compensation through Massachusetts’ Renewable Portfolio Standard (RPS) program. Adding energy storage to your solar system may also qualify you for some compensation under SMART.
Solar Tax Exemptions
Massachusetts provides additional benefits with solar tax exemptions. The solar sales tax exemption ensures you pay no sales tax on your system, and the solar property tax exemption means your property taxes won’t increase as a result of adding solar panels.
Net Metering In Massachusetts
By connecting your solar panel system to the grid, you can take advantage of net metering, a highly beneficial solar incentive in Massachusetts. Net metering allows you to earn credits for any excess electricity your solar panels produce and send back to the grid. When your solar system isn’t generating power and you need electricity from the grid, these credits are applied to your bill. This means you can significantly reduce or even eliminate your electric bills with solar panels.
While most regulated electric companies in Massachusetts support net metering for solar systems with inverters rated up to 10 kW, a few municipal utilities do not offer this option. If you have a three-phase power supply, typically found in mid-sized businesses or large housing developments, net metering is available for systems with inverters rated up to 25 kW. Systems exceeding these limits will receive only 60% of the net metering credits.
In August 2022, Massachusetts enacted a new solar policy that raised the residential net metering inverter rating limit from 10 kW to 25 kW, but this change has not yet taken effect. The Department of Public Utilities updated the state’s net metering regulations in 2024 and plans to implement further revisions, potentially including an increase to the residential cap.
Options for Financing Your Solar Panel System
Here are a few ways to finance your solar panel system so you don’t have to provide all the money upfront:
Cash Purchase
You’ll own the system outright and pay for it upfront, offering the best long-term savings.
Solar Loan
Allows you to retain ownership of your system with little to no money down. Look for subsidized clean energy loans through local incentive programs for the best rates. Home equity loans or personal loans are alternatives, though private solar loans may come with higher interest rates or upfront fees.
Solar Lease or Power Purchase Agreement (PPA)
A third-party company owns the system and either leases you the panels (solar lease) or sells you the electricity they generate (PPA). These options typically offer lower savings and can involve lengthy contracts. Be sure to carefully review the terms before committing to avoid potential drawbacks.
Navigating the Solar Interconnection Process
Navigating the solar interconnection process in Massachusetts involves several key steps to connect your solar panel system to the electrical grid:
Select a Solar Installer
Choose a licensed solar installer to evaluate your property, design your system, and manage the installation.
System Design and Permitting
The installer will design your solar system and obtain the necessary permits from your local municipality, including building and electrical permits.
Interconnection Application
Submit an interconnection application to your utility company. This application details your solar system’s specifications and how it will connect to the grid. In Massachusetts, major utilities like Eversource, National Grid, and Unitil are required to support interconnection.
Utility Review
The utility company will review your application to ensure compliance with technical requirements and grid safety. This may include a site visit and technical assessment.
System Installation
After receiving approval and permits, your solar system will be installed. This includes panel mounting, wiring, and inverter setup.
Inspection and Approval
A final inspection by local authorities and/or the utility company is required to verify that the installation meets all codes and operates safely.
Grid Connection
Once the inspection is approved, the utility will connect your system to the grid. This may involve installing a net meter to track your energy production and consumption.
Start Generating Power
With your system connected, you will begin generating electricity and can start benefiting from net metering, which allows you to earn credits for excess power sent back to the grid.
Ongoing Monitoring and Maintenance
Regular monitoring and maintenance ensure your system operates efficiently and any issues are promptly addressed.
By following these steps, you can successfully navigate the solar interconnection process in Massachusetts and start enjoying the benefits of solar energy.
Are Solar Panels Worth It?
Yes, solar panels are generally a valuable investment, both financially and ethically. Although the initial cost of a home solar power system can be high, tax credits and other incentives can significantly lower these upfront expenses. Over time, many users experience substantial savings on their electric bills, which helps offset the overall cost. Additionally, solar panels provide the satisfaction of contributing to environmental sustainability. In most cases, the benefits of going solar far exceed the drawbacks.
